Consumers should start questioning unjustified price rises more closely, as greedy traders raise prices simply because the economy is performing well, the Taoiseach said yesterday.
Responding to a call by the governor of the Central Bank, Mr Maurice O'Connell, for wage and public spending restraint, Mr Ahern said the Government would play its part in fighting inflation but that the private sector must behave more responsibly.
"If someone thinks that there is some magic wand that the Government can play to cure inflation while everyone else goes along putting up prices, and putting up wages and demanding wages, well then it won't work," he said.
In Warsaw at the end of a two-day visit to Poland, the Taoiseach said it was clear inflation was being driven upwards by price increases that are not justified by the current rate of inflation.
"I don't want to pick on any sector, but as far as I can see price increases now seem to be just because the economy is good. The reason why we ran so well over the last decade or so is because price stability and inflation was the issue that we all focused on. We have to get just as vigilant now as we were a decade ago," he said.
Criticising employers who increase wages because the labour market is tight, the Taoiseach said the increases outlined in the Programme for Prosperity and Fairness should not be regarded as bottom line increases but as agreed rates of pay. And he claimed that the Government was taking action to ensure that the sources of inflation under its control should be dealt with effectively.
"I have been saying for several months now that price stability is a central plank of any economic policy, and that we have to make sure that we take it very seriously. We have a range of issues in the housing area and land servicing and trying to make sure that we assist the construction industry, both on the supply side of housing and trying to provide the necessary infrastructure and trying in the Planning and Development Bill to undo all the blockages and put extra staff into Bord Pleanala. We have been encouraging the local authorities to use further resources," he said.
Mr Ahern did not rule out cutting tax on items such as petrol, tobacco and alcohol to reduce inflation but said he wanted first to see existing controls implemented more effectively.
Yesterday, Mr Ahern inaugurated Europe's largest cement kiln at Ozarow, outside Warsaw, which has been established by CRH. Before he flew back to Dublin, he presented AIB's $50 million (€53.8 million) venture capital fund for Poland and opened the new office in Warsaw of Mercury Holdings.
